In a report published Thursday, Raymond James analyst Theoni Pilarinos downgraded the rating on Caterpillar (NYSE: CAT) from Outperform to Market Perform, and lowered the price target from $93.75 to $89.00.

In the report, Raymond James noted, “Heading into the quarter, we brought down our forecasts following two months of weak dealer stats. We also stated that we needed to see some type of real improvement in demand to maintain our optimistic view on the stock. In CAT's release yesterday, EPS missed our forecast and the company revised its earnings outlook downwards (yet again) due to end market weakness. More specifically, continued Resources sales declines across all regions more than offset the (to-date tepid) recovery in US construction markets. In addition, the relatively stable Power Systems and Construction segments felt some of the knock-on effects of weaker commodities demand (i.e. lower sales of large construction equipment and standby power generation associated with mining activity). Looking to next year, the outlook is for further declines in new mining equipment orders and only small improvements in the parts business. Finally, not even dealer inventory reordering, despite several quarters of reductions, is expected to have a meaningful impact on sales in 2014. While we continue to view 2013 as a ‘transitionary' year with CAT taking measures to reduce costs and capex, these efforts have been overshadowed by a more meaningful decline in sales. The worst has likely past for the company, in our view, and we expect an improvement in earnings next year as cost savings start to take effect.”